The Future of Defense Spending

With the war in Ukraine ongoing and geopolitical tensions with China showing no signs of receding, there is a renewed focus on defense spending not seen since the Cold War.

by Michael Halloran

Consequently, we expect investor interest in the defense industry to remain high in the coming years. This piece reviews critical aspects of the defense industry and highlights where future modernization dollars could be spent.


Background

The Department of Defense (DoD) is America’s largest government agency with the mission to provide the military forces needed to deter war and ensure our nation’s security. The DoD and Department of Energy (responsible for nuclear activity) together have annual budgets for research and development (R&D) of new technologies that easily exceed $100 billion. The total budget for U.S. national defense now exceeds three-quarters of a trillion dollars a year. Procurement and R&D make up over a quarter of a trillion dollars of this. The direction of future R&D and procurement spending will have a major impact on many industries in addition to traditional defense, with significant implications for investors.

Continue to read full PDF



Disclaimer

Past performance is no guarantee of future performance and future returns are not guaranteed. There are risks associated with investing in stocks such as a loss of original capital or a decrease in the value of your investment. For additional information or questions, please consult with your Financial Advisor. This report is provided for informational purposes only and shall in no event be construed as an offer to sell or a solicitation of an offer to buy any securities. The information described herein is taken from sources which we believe to be reliable, but the accuracy and completeness of such information is not guaranteed by us. The opinions expressed herein may be given only such weight as opinions warrant. This Firm, its officers, directors, employees, or members of their families may have positions in the securities mentioned and may make purchases or sales of such securities from time to time in the open market or otherwise and may sell to or buy from customers such securities on a principal basis.